Why Silvergate Capital Stock Was As Good As Gold Today

What happened

As the days get shorter and we head into winter, could the crypto winter thaw? Judging by the latest price movements of many cryptocurrencies, at least some investors have such hope.

On Monday, optimism about it and an upcoming quarterly earnings release sent the crypto-leaning bank’s share price soaring Silvergate Capital (IF 5.39%). The stock rose more than 5% on the day, even eclipsing the frothy 2.7% gain in the S&P500 index.

So what

Monday was a solid, if unspectacular, day for cryptocurrencies. Almost all of the majors were trading in positive territory, with Bitcoin up nearly 2% late afternoon and post-merger Ethereum approaching a gain of 3%.

It’s too early to tell, but it looks like investors might be regaining their risk tolerance. In recent months, assets considered more speculative – such as tech stocks and, in particular, cryptocurrencies – have taken a hit due to macroeconomic fears.

Specific to Silvergate, some could be accumulating in the stock ahead of the company’s impending earnings report. That should happen before the market opens on Tuesday, and if analysts’ estimates turn out to be at least somewhat accurate, Silvergate should post encouraging growth numbers.

Now what

According to statistics compiled by Yahoo! Finance, these tipsters collectively estimate nearly 53% year-over-year growth in net earnings per share for the quarter to $1.34 despite the frigid crypto market conditions. They also predict revenue to nearly double to over $100 million. Even if the company doesn’t quite hit those numbers, it will likely show some improvement regardless.

Eric Volkman has positions in Bitcoin and Ethereum. The Motley Fool has positions and recommends Bitcoin and Ethereum. The Motley Fool recommends Silvergate Capital Corporation. The Motley Fool has a disclosure policy.

Sallie R. Loera